Software And Services For Profits, AI Hardware Is Only Table Stakes
The Next Platform, Tuesday, June 11th, 2024
A pattern seems to be emerging across the original equipment manufacturers, or OEMs, who have been largely waiting on the sidelines to get into the generative AI riches story.
Nvidia is making money, and now AMD is, too. HBM memory suppliers are making money, and so is the Taiwan Semiconductor Manufacturing Co chip foundry.
But, as has often been the case with traditional HPC simulation and modeling workloads over the decades, the companies that make scale-out clusters for massive compute jobs like AI training and now inference could not get very many GPU allocations during the past two years of the GenAI boom, so they didn't make any money - meaning, they did not generate profits - because they didn't really have anything in the way of AI server, storage, or networking revenues. And now that the OEMs are finally able to get some GPU allocations, they are beginning to drive sales, but they do not seem to be able to make money on this ridiculously expensive iron. Which is, well, ironic.